Business & Finance

South Sudan Official Calls Tax Exemptions Too Costly

JUBA, SOUTH SUDAN - South Sudan's National Revenue Authority says the government is losing vast sums of money each month because of excessive tax exemptions.

Olympio Attipoe, commissioner-general of South Sudan's National Revenue Authority, said unidentified individuals had threatened to have him fired after he revoked the tax exemptions of big companies � exemptions that had been pushed by high-ranking government officials.

"These are people who are trusted by his excellency, the president, to support his vision, Attipoe told South Sudan in Focus. They are not doing their work. They are busy running around. We have been here, the threat is going on. They don't want the system to work because they are benefiting from the chaos."

Attipoe said the revenue authority was collecting far less revenue than it should. At times we collect 1.5 billion [South Sudanese pounds] and we grant exemptions of 3 billion. At times what we are losing to tax exemption is more than 200% of what we are collecting," he said.

Attipoe said some exemptions are granted to allow nongovernmental organizations and U.N. agencies to provide humanitarian assistance to citizens, but many others are granted to companies and individuals hired by the government.

A June 14th letter seen by South Sudan in Focus � written by Mayiik Ayii Deng, a minister in the office of the president, and addressed to Finance Minister Salvatore Garang � requests that the National Revenue Authority exempt the RAK Resources Group from paying taxes. The company is described as an indigenous construction company.

The letter states the company planned to import factory service equipment, medical items, fuel, agricultural and petroleum products, construction materials and food worth more than $491 million U.S.

The letter states, "In reference to the government's policy on promotion of local enterprise, and the president's commitment to provide enablers to revive the economy, I am requesting your esteemed office to grant tax exemption on the above mentioned imports."

Garang Majak Bok, first undersecretary in the Finance Ministry, wrote a letter approving that request.

Doing 'the right thing'

Attipoe revoked the exemption after learning from social media and other sources that the RAK tax exemption request had come from Deng.

"The letter was written by somebody in the office of the president to the minister [of finance]. The relevant issue for people to know is that as an institution we are autonomous and we are determined to do the right thing. It is not a matter of who is involved," Attipoe told VOA.

The South Sudan tax commissioner declined to say how many exemptions he had revoked so far, but said he'd also revoked an exemption for the ABMC Thai Construction Co.

Juba-based economist and University of Juba lecturer Ahmed Morgan said granting exemptions to big companies like RAK Resources Group negatively affects the country's development.

"If every business begins to apply for exemptions � and I know some companies are worth millions of U.S. dollars � if custom duties are 25 percent of that value, you see how much money is lost," Morgan told South Sudan in Focus.

Morgan also said granting tax exemptions to huge firms can create monopolies in the marketplace, making it impossible for other firms to compete.

He said all exemptions should be granted in a transparent manner.

"They are not done transparently. Items to be exempted should be known � which companies are to benefit from exemptions and why � but if things are done in the dark, it is very difficult. Government has to come with accountability measures," Morgan said.

Several attempts to reach Deng for comment were unsuccessful. He was traveling in the United States.

Source: Voice of America